NEW YORK (The Deal) -- Johnson Controls Inc. (JCI) said Thursday it has a deal in place to sell its HomeLink unit to Gentex Corp. (GNTX) for $700 million, part of the auto parts giant's broader campaign to shed its electronics offerings.
HomeLink is a vehicle-based control system that enables drivers to remotely activate garage door openers, entry door locks, home lighting, security systems, entry gates and other radio frequency products. The deal includes all of HomeLink's assets, intellectual property, facilities and employees.
Zeeland, Mich.-based Gentex said HomeLink has been integrated into its rearview mirror product for more than 10 years, and that it would be a good fit with its existing offerings.
"HomeLink is a strategic and welcome addition to our portfolio of automotive products," Gentex chairman and CEO Fred Bauer said in a statement. "Our two businesses share similar cultures and traits, both being people-oriented, innovative, leading and technologically-driven."Gentex, which in addition to automatic-dimming rearview mirrors makes camera-based lighting and driver-assist systems for the automotive industry as well as aircraft windows and fire protection products, said that once fully integrated, HomeLink should add $125 million to $150 million in annual revenue, and boost companywide gross margins. Milwaukee-based Johnson Controls in March said it had retained JPMorgan Chase & Co. (JPM) to assist in the sale of its automotive electronics segment. The company, which ranks as the largest U.S. auto parts maker, said it separated HomeLink from the rest of its electronics unit to maximize the value of the businesses, saying the units "offer distinct advantages and synergies for different sets of strategic buyers." An automotive source said Gentex was likely willing to pay up for HomeLink, the most valuable asset that Johnson Controls had on the block, but apparently was not interested in the entire business. Johnson Controls said it hoped to announce a deal for the remaining assets in the current quarter, with sources saying Chinese firms are the most likely buyers. Written by Lou Whiteman
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